DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2015

Summary of carrying amount and estimated fair value of financial instruments

The carrying amount and the estimated fair value of the Company’s financial instruments is summarized below.



June 30, 2015	Carrying amount		Estimated fair value
($ in thousands)	Carrying amount		Estimated fair value
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,638	$	9,638
U.S. government-sponsored agencies	225,312		225,312
Obligations of states and political subdivisions	327,393		327,393
Commercial mortgage-backed	45,156		45,156
Residential mortgage-backed	92,249		92,249
Other asset-backed	14,599		14,599
Corporate	440,615		440,615
Total fixed maturity securities available-for-sale	1,154,962		1,154,962

Equity securities available-for-sale:
Common stocks:
Financial services	36,289		36,289
Information technology	26,836		26,836
Healthcare	26,271		26,271
Consumer staples	14,335		14,335
Consumer discretionary	24,732		24,732
Energy	22,893		22,893
Industrials	20,293		20,293
Other	12,793		12,793
Non-redeemable preferred stocks	14,844		14,844
Total equity securities available-for-sale	199,286		199,286

Short-term investments	32,758		32,758

Liabilities:
Surplus notes	25,000		11,064



December 31, 2014	Carrying amount		Estimated fair value
($ in thousands)	Carrying amount		Estimated fair value
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,703	$	9,703
U.S. government-sponsored agencies	215,616		215,616
Obligations of states and political subdivisions	326,058		326,058
Commercial mortgage-backed	46,762		46,762
Residential mortgage-backed	97,953		97,953
Other asset-backed	16,005		16,005
Corporate	415,402		415,402
Total fixed maturity securities available-for-sale	1,127,499		1,127,499

Equity securities available-for-sale:
Common stocks:
Financial services	34,379		34,379
Information technology	26,865		26,865
Healthcare	26,852		26,852
Consumer staples	16,694		16,694
Consumer discretionary	22,691		22,691
Energy	22,863		22,863
Industrials	18,221		18,221
Other	16,056		16,056
Non-redeemable preferred stocks	12,415		12,415
Total equity securities available-for-sale	197,036		197,036

Short-term investments	53,262		53,262

Liabilities:
Surplus notes	25,000		12,308

Summary of assets and liabilities measured on recurring and non-recurring basis

Presented in the table below are the estimated fair values of the Company’s financial instruments as of June 30, 2015 and December 31, 2014.



June 30, 2015			Fair value measurements using
($ in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial instruments reported at fair value on recurring basis:
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,638	$	—	$	9,638	$	—
U.S. government-sponsored agencies	225,312		—		225,312		—
Obligations of states and political subdivisions	327,393		—		327,393		—
Commercial mortgage-backed	45,156		—		45,156		—
Residential mortgage-backed	92,249		—		92,249		—
Other asset-backed	14,599		—		14,599		—
Corporate	440,615		—		438,993		1,622
Total fixed maturity securities available-for-sale	1,154,962		—		1,153,340		1,622

Equity securities available-for-sale:
Common stocks:
Financial services	36,289		36,286		—		3
Information technology	26,836		26,836		—		—
Healthcare	26,271		26,271		—		—
Consumer staples	14,335		14,335		—		—
Consumer discretionary	24,732		24,732		—		—
Energy	22,893		22,893		—		—
Industrials	20,293		20,293		—		—
Other	12,793		12,793		—		—
Non-redeemable preferred stocks	14,844		7,754		7,090		—
Total equity securities available-for-sale	199,286		192,193		7,090		3

Short-term investments	32,758		32,758		—		—

Financial instruments not reported at fair value:
Liabilities:
Surplus notes	11,064		—		—		11,064



December 31, 2014			Fair value measurements using
($ in thousands)	Total		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial instruments reported at fair value on recurring basis:
Assets:
Fixed maturity securities available-for-sale:
U.S. treasury	$	9,703	$	—	$	9,703	$	—
U.S. government-sponsored agencies	215,616		—		215,616		—
Obligations of states and political subdivisions	326,058		—		326,058		—
Commercial mortgage-backed	46,762		—		46,762		—
Residential mortgage-backed	97,953		—		97,953		—
Other asset-backed	16,005		—		16,005		—
Corporate	415,402		—		413,740		1,662
Total fixed maturity securities available-for-sale	1,127,499		—		1,125,837		1,662

Equity securities available-for-sale:
Common stocks:
Financial services	34,379		34,376		—		3
Information technology	26,865		26,865		—		—
Healthcare	26,852		26,852		—		—
Consumer staples	16,694		16,694		—		—
Consumer discretionary	22,691		22,691		—		—
Energy	22,863		22,863		—		—
Industrials	18,221		18,221		—		—
Other	16,056		16,056		—		—
Non-redeemable preferred stocks	12,415		7,745		4,670		—
Total equity securities available-for-sale	197,036		192,363		4,670		3

Short-term investments	53,262		53,262		—		—

Financial instruments not reported at fair value:
Liabilities:
Surplus notes	12,308		—		—		12,308

Reconciliation of assets measured at fair value on recurring basis using significant unobservable inputs

Presented in the table below is a reconciliation of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2015 and 2014. Any unrealized gains or losses on these securities are recognized in other comprehensive income. Any gains or losses from disposals or impairments of these securities are reported as realized investment gains or losses in net income.



	Fair value measurements using significant unobservable (Level 3) inputs ($ in thousands)
Three months ended June 30, 2015	Fixed maturity securities available-for-sale, corporate			Equity securities available-for-sale, financial services		Total
Beginning balance	$	1,663		$	3	$	1,666
Settlements	(39		)	—		(39		)
Unrealized gains (losses) included in other comprehensive income	(2		)	—		(2		)
Balance at June 30, 2015	$	1,622		$	3	$	1,625

Six months ended June 30, 2015
Beginning balance	$	1,662		$	3	$	1,665
Settlements	(43		)	—		(43		)
Unrealized gains (losses) included in other comprehensive income	3			—		3
Balance at June 30, 2015	$	1,622		$	3	$	1,625



	Fair value measurements using significant unobservable (Level 3) inputs ($ in thousands)
Three months ended June 30, 2014	Fixed maturity securities available-for-sale, corporate			Equity securities available-for-sale, financial services		Total
Beginning balance	$	1,975		$	3	$	1,978
Settlements	(42		)	—		(42		)
Unrealized gains (losses) included in other comprehensive income	16			—		16
Balance at June 30, 2014	$	1,949		$	3	$	1,952

Six months ended June 30, 2014
Beginning balance	$	1,976		$	3	$	1,979
Settlements	(42		)	—		(42		)
Unrealized gains (losses) included in other comprehensive income	15			—		15
Balance at June 30, 2014	$	1,949		$	3	$	1,952